Why You Should Rent During Retirement/Transition From The Military

19 February 2018

This post may contain affiliate links, from which I may earn revenue to support this free site. All opinions are my own, and I only promote products that I use and love!

When leaving the military, many people want to buy a house. It’s a perfectly normal desire – for many military families, it’s been a long-term dream to put down roots and buy their “forever” home. No more crazy landlords, white walls, and unpacking every two years! I am so sick of unpacking!

Unfortunately, the “forever home” is likely a myth, and acting on this desire can have some seriously negative long-term consequences. For the vast majority of military families, it’s smarter to rent for a year or two and then consider whether buying a house is the right choice for your particular situation at that particular time. There are three main reasons why this is true: employment instability, stress and decision-making, and financial upheaval.

Plus, those job changes often come with geographic moves: The same study reported that over 37% of veterans currently lived in a different state from where they originally settled when leaving the military. These two facts are important to know when making the decision to buy a house.

Tying yourself to a house (and probably a mortgage) limits your options, financially and geographically. What do you do if you buy a house and then discover that your first job isn’t the one you want to be in forever?

remain in a job that you don’t like because you have a house there

limit your job search to the area of your home

sell the house (probably at a loss since it has been such a short period of ownership)

Imagine being stuck in a job that isn’t right, and facing these options. Compare that to the relative freedom of waiting until your lease ends or exercising a break-lease option, and moving on without the burden of that real estate. Which one seems better to you?

While nothing in life is guaranteed, you should assume that the first few years after leaving the military will be a little unsettled. It just doesn’t make sense to buy a house when life is unsettled.

Stress and Decision-Making

Leaving the military is one of the largest transitions that most folks will make in their lives. For civilians, retirement from a job ranks 10th on the list of the 100 biggest stressors. For military families, the transition to civilian life is more complicated than just a retirement or job change. It combines a wide variety of financial and emotional stressors, possibly including but not limited to:

retirement

a major change of financial state

changing to a new field of employment

change of housing situation

spouse beginning or stopping working outside the home, or a spouse switching jobs

change of location

starting or stopping an educational program

change to working hours, social activities, and recreational pursuits

Scientifically and anecdotally, transition is a challenging time for nearly everyone involved: the service member who is separating or retiring, the spouse, and affected children. The impact is compounded when multiple family members are dealing with these stressors, and each is also trying to help the other. There’s no doubt that transition is hard all around.

Which brings us to the next point: Our brains are hard-wired to make decisions differently when we’re under stress. It’s a survival mechanism that helps prevent analysis paralysis and allows us to identify the fastest way to security. Unfortunately, society has programmed Americans to believe that homeownership represents security while discounting the amount of insecurity that comes with the responsibility of having a mortgage and actually owning a home.

You’ve probably heard the common wisdom, “Don’t make any major life decisions for the first year after (fill in the blank.)” The same logic applies to the transition from military to civilian life.

There are a lot of major decisions that HAVE to be made during the transition or retirement process: Should you choose the Survivor Benefit Plan? Where do you want to live, and what do you want that life to look like? Will you work, and will your location be decided by the job or will your job search be decided by the location? Allow yourself to focus on the decisions that HAVE to be made, and give yourself the time to adjust to your new life before tying yourself to a house.

Financial Upheaval

The first few years after leaving the military can be financially chaotic. You may or may not have retirement pay, or be working through the process for disability compensation. You may have a long job hunt, or you may take lower-paying work until you find something more suited to your skills and experience. You may choose to go to school before returning to work full-time. A spouse may leave or return to the workforce, or finding that another move means yet another career change.

With all this financial change, it’s hard to pinpoint how much house you can actually afford. Hopefully, you’ve completed the 12-month post-retirement budget that is (allegedly) required during the (supposedly mandatory) transition program offered by the military. But let’s be realistic: those budgets, while useful, are just guesses. Leaving the military can come with a lot of financial surprises.

Buying a house is typically the largest purchase anyone will make in their life. Buying a house when your budget is built on guesses is a bad idea.

Stepping Back and Stepping Surely

I absolutely understand the desire to buy a house andnever move again. Just yesterday, I asked, “I wonder how long we would have to live in this house before every single item was unpacked and put away in the right place?” I have no idea that answer, but I know we haven’t reached that point yet, and I hope that happens someday. Plus, it’s nice to think of painting without having to worry about painting back, or putting an unlimited number of holes in the walls, wherever you want, or starting an amazing garden, or whatever “homeowner” dreams you’ve been stacking up.

As big as those dreams may be, give yourself just another year or two before you jump into a house. Make the conscious decision to rent for a year or two, and use that time to discover how the next phase of your life is really going to shape up. You’ll be well-positioned to adjust to the inevitable surprises without the burden of a house, and then you’ll be a in a great place to decide when (or whether) to buy that “forever” home. When you are ready to make that purchase, you’ll be emotionally and financially prepared to make a great decision and choose a house that truly works for you. How awesome will that be?

Do you want to know more about your military pay and benefits?

Things change fast around here! Keep up-to-date with email alerts about the topics that are important to you!

Success! Now check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

First Name

Email Address

We use this field to detect spam bots. If you fill this in, you will be marked as a spammer.

Comments

That is some sound advice. I hear so many people asking how they can get a VA loan right before or right after retirement. I think the right answer is, don’t get one. Rent. You have all the right reasons. It will become a bad financial decision. You will become a reluctant landlord. We all know the facebook group that is full of military landlords that hate their house and regret buying.

Of course, if you are buying an investment property that will cash flow well be a good rental, that is a separate issue.

If you are buying your forever home with vaulted ceilings, french trim, and sub-zero freezer, you are going to regret it!

Agreed! 100%! We fit A LOT of the statistics you mentioned. We are not in the state we were in when we retired from the military. My husband quit his first job after the Navy and is now in college full-time.

So many changes happen after retirement – changes that are still felt two year after!

There is this other thing that happens when you have whole communities of military people who retired and bought their forever homes in the same place. Eventually, a subculture develops that can be very supportive because everyone is in a similar situation and your neigbhors tend to understand you a little better. Some people find it stifling because it seems you never get away from your military identity. Others find comfort in it because it is as if only the dress code has changed. In our little town, the police chief, the fire chief, the mayor and three city councilmembers are former Navy submariners. So are most of the math teachers, science teachers, and coaches at the high school and middle school. They bought forever homes here, rode out the economic uncertainty of retirement, and found satisfying jobs that enabled them to stay here. In a lot of ways, the economy of this town was built by the people who bought their forever homes in this little place, and figured out a way to make it work. It’s a different look at your argument, but here, it works.

Subscribe

Search

Featured On

Affiliate Disclosure

This site does contain advertising and affiliate links. If you click on an advertisement or link, I may be compensated. I only promote companies that I love and trust.
Kings High Media/KateHorrell.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com

Disclaimer

Kate does not represent the Department of Defense, the Department of Veterans Affairs, or any government agency. This blog is strictly for informational and entertainment purposes only. The content on this site should not be considered professional financial or legal advice. I may receive compensation through affiliate or advertising relationships from products mentioned on this site. All reviews on this site represent the personal opinions of the author. All references to third party products, rates, and offers may change without notice.